Holding

The Single Judge's limited interim order was proper and the Division Bench's order granting full interim relief was set aside.

Summary

The case involved a dispute between two brothers over a property under development, where the elder brother (the plaintiff) claimed exclusive ownership and sought a mandatory interim injunction to restrain the younger brother and his son from acting as his attorneys, entering the property, and operating related bank accounts. The younger brother contended that he had contributed 90% of the purchase price, was acting under valid powers of attorney, and that a family settlement gave him rights to the property. The Single Judge of the Bombay High Court granted only limited interim relief, allowing construction to continue and sales proceeds to be deposited in a joint account for payment of liabilities, rejecting the plaintiff's request for a full mandatory injunction. The Division Bench overturned this, granting the full relief sought. On appeal, the Supreme Court held that the Single Judge had exercised his discretion reasonably, that the test for interfering with an interlocutory order is whether it is arbitrary, capricious or perverse, and that the plaintiff had not made a strong prima facie case for a mandatory injunction. Consequently, the Division Bench's order was set aside and the Single Judge's limited order restored.

Issues considered

The appropriateness of granting a mandatory interim injunction in the present property dispute
Whether the Single Judge's limited interim relief was arbitrary, capricious or perverse
Whether the Division Bench erred in converting the limited order into a full interim decree
The applicable test and principles for granting interlocutory mandatory injunctions

Legislation cited

Transfer of Property Acts. 44

Subjects

family settlementpowers of attorneymandatory injunctioninterlocutory injunctioninterim reliefproperty disputeconstructionjoint bank accountequitable discretionappellate review

Judgment

[2011) 6 S.C.R. 913

PURSHOTTAM VISHANDAS RAHEJA AND ANOTHER A
v.
SHRICHAND VISHANDAS RAHEJA (D) THROUGH LRS.
AND OTHERS
(Civil Appeal No. 4005 of 2011)

MAY 6, 2011 B

[P. SATHASIVAM AND H. L. GOKHALE, JJ.]

Interim Order:
c
Suit for mandatory injunction - Interim relief - Extent of
- Sui{ property being developed and flats for sale being
constructed on it - Dispute between brothers as regards the
suit property - Single Judge of High Court granting limited
interim orders so that the construction can go on and flats can 0
be purchased - Division Bench making the notice of motion
absolute and granting full interim relief - HELD: The instant
case was not the one where mandatory interim injunction as
sought by the plaintiff was justified - The Single Judge passed
limited interim relief in the interest of both the parties as well E
as flat purchasers - The Single Judge had passed a
reasoned order, and it could not be said that he had exercised
discretion in an arbitrary, capricious or perverse manner -
There was no reason for the appellate Bench to interfere and
set aside that order- The order passed by the Division Bench
of the High Court is set aside and that of the Single Judge F
restored.

A dispute arose between two brothers, namely,
appellant No.1 and respondent No.1, as regards the suit
property, which was being developed by raising G
constructions theJ"eon. Respondent No.1 had executed
three Power of Attorneys in favour of appellant No.1,
which the latter stated were executed for valid
consideration. Respondent No.1 filed a suit arraying
913 H
914 SUPREME COURT REPORTS [2011] 6 S.C.R.

A appellant No.1 as defendant No.1, and his son as
defendant No.2 and the Indian Bank, HSBC Bank and the
State Bank of India as defendant Nos. 3 to 5 respectively.
The principal prayers in the suit were for permanent
injunction restraining defendant Nos. 1 and 2 from in any
B manner directly or indirectly acting or holding themselves
out as attorneys or agents of the plaintiff or dealing with
any of the properties or business of the plaintiff including
the suit property or any premises or constructions
thereon; and restraining defendants no. 1 and 2 from in
C any manner entering upon the suit property or any
premises or construction thereon. It was also prayed that
defendant Nos. 1 and 2 be ordered and decreed to deliver
to the plaintiff the documents listed in Ext. 4 and all other
documents, correspondences and records belonging to
the plaintiff, in the possession or power of defendant
0
Nos. 1 and 2. The notice of motion was taken out in the
suit with the prayers similar to those made in the plaint
and with further prayer seeking to restrain defendant Nos.
3 to 5 from honoring any cheques signed by defendant
No.1 relating to the accounts mentioned therein. The
E Single Judge of the High Court considered the stand of
defendant Nos. 1 and 2 and in the circumstances,
observed that development and construction work had
progressed to a substantial extent as only some finishing
works were remaining and 23 flats were already sold;
F and, therefore, directed that the development and
construction works can be completed at the site and flats
can be sold and the sale proceeds must be deposited in
the joint bank account alone, and the account would be
operated only to the extent paying off the liabilities
G towards the suit property and its development. However,
on appeal, the Division Bench held that a strong prima
facie case was made out and by the impugned order, the
notice of motion taken up by the plaintiff was made
absolute thereby granting full interim relief to respondent
H no. 1.
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND- 915
VISHANDAS RAHEJA (D) THR. LRS.

In the instant appeal filed by defendant Nos. 1 and A
2, it was contended for the appellants that the Single
Judge had exercised his discretion appropriately and
there was no reason for the Division Bench of the High
Court to interfere therein. It was also contended that the
prayers of the notice of motion were principal prayers in B
the plaint and, therefore, the order of the Division Bench
of the High Court amounted to granting a decree at the
interlocutory stage which was not justified.

Allowing the appeal, the Court
c
Held: 1.1. The test to be applied to assess the
correctness of the order of the Single Judge would be
whether the order is so arbitrary, capricious or perverse
1
that it should be interfered at an interlocutory stage in an
intra-court appeal. [Para 22) [932-E-F] D

Wander Ltd. and another V!3. Antox India P.Ltd. 1990
(Supp) SCC 727; Dorab Cawasji Warden v. Coomi Warden
1990 (1) SCR 332 (1990) 2 SCC 117; Metro Marins and
another v. Bonus Watch Co. (P) Ltd. and Others (2004) 7 E
sec 478; and Kishore Kumar Khaitan and another vs.
Praveen Kumar Singh 2006 (2 ) SCR 176 =(2006) 3 SCC
312, relied on.

Films Rover International Ltd. v. Cannon Film· Sales Ltd.
(1986) 3 All ER 87 - referred to. F

1.2. The Single Judge has passed a detailed order
explaining as to why he was constrained to grant only
the limited interim relief. It was in the interest of both the
parties as well as the flat purchasers. The order passed G
by the Single Judge is also on the basis that anything
beyond the limited protection given at that stage would
deny the opportunity to the appellants to establish their
case at the trial when it is not in dispute that appellant
H
916 SUPREME COURT REPORTS [2011) 6 S.C.R.

A No.1 contributed ninety percent of the purchase money
to the property and he took steps all throughout to
develop the property. [Para 16] [928-F-H; 929-A]

1.3. The Single Judge has considered all the relevant
aspects of the matter and thereafter passed the limited
8
interim order whereby documents for sale of the flats will
continue to be signed by the respondents, though, the
monies coming into the bank account thereafter will be
utilized only for the purposes that are necessary. The
appellants have not been directed to be removed from
C the property inasmuch as they were the people on the
spot carrying on the development prior to filing of the suit.
The order sought by the respondents, if granted, would
mean granting all the reliefs and a sort of pre-trial decree
without the opportunity to the appellants to have their
D plea examined with respect to the family arrangement,
which plea is supported by their sisters. [Para 21] [932-
C-E]

1.4. The present case is not the .:>ne where mandatory
E interim injunction, as sought by the respondents was
justified. The Single Judge had passed a reasoned order,
and, in no way, it could be said that he had exercised the
discretion in an arbitrary, capricious or perverse manner,
or had ignored the settled principles of law regarding
F grant or refusal of interlocutory injunction. There was no
reason for the appellate Bench to interfere and set aside
that order. The order passed by the Division Bench of the
High Court is set aside and that of the Single Judge
restored. [Para 23 and 24] [934-D-G]
G Case Law Reference:
1990 (1) SCR 332 relied on Para 17
(1986) 3 All ER 87 referred to Para 18

H (2004) 1 sec 478 relied on Para 19
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 917
VISHANDAS RAHEJA (D) THR. LRS.
2006 (2) SCR 176 relied on Para 20 A
(1990) (Supp) SCC 727 relied on para 22
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4005 of 2011.
B
From the Judgment & Order dated 12.8.2010 of the High
Court of Judicature at Bombay in Appeal No. 550 of 2009 in
Notice of Motion No. 1787 of 2009 in Suit No. 1266 of 2009.

Mukul Rohatgi, L. Nageswara Rao, Prateek Jalan, M.L.
Ranjeet, Ashish Kamat, R. Karanjawala, Manik Karanjawala, C
' Ruby Singh Ahuja, Deepti Sarin, Pragya Ohri, Karanjawala &
Co., for the Appellants.

K.K. Venugopal, R.F. Nariman, Jonathan Solomon, Vikas
Mehta, Rohit Bhat, Narhari Singh for the Respondents. D

The Judgment of the Court was delivered by

GOKHALE J. 1. Leave granted.

2. This appeal by special leave by original Defendants E
Nos. 1 and 2 seeks to challenge the Judgment and Order dated
12.8.2010 passed by a Division Bench of the Bombay High
Court allowing the Appeal No. 550/2009 against the order of
a Single Judge dated 9.9.2009 in Notice of Motion No._ 1787/
2009 in Suit No. 1266/2009 filed by Respondent No. 1 (since F
deceased). The learned Single Judge had granted a limited
relief to Respondent No. 1 (original plaintiff) whereas by the
Order passed by the Division Bench the Notice of Motion taken
1 up by the original Plaintiff had been made absolute in terms of

prayers (a), (b) and (c), and thereby granting full interim relief G
which was sought by Respondent No. 1 herein.

3. In view of the demise of Respondent No. 1, the heirs of
Respondent No. 1 have come on record of the appeal. Their
case is that the interim relief as was sought, though in the nature
H
918 SUPREME COURT REPORTS [2011] 6 S.C.R.

A of mandatory relief, was necessary in the facts and
circumstances of the case. As against that, the submission on
behalf of the Appellants is that the learned Single Judge had
exercised his discretion appropriately and there was no reason
for the Division Bench to interfere therein. The Appellants also
B contend that the prayers in the Notice of Motion are the
principal prayers in the plaint and, therefore, it amounts to
granting a decree at the interlocutory stage which was not
justified in the present case.

C 4. The question for determination, therefore, is as to
whether, in the facts and circumstances of the case, the
mandatory order as passed by the Division Bench was justified,
or whether the learned Single Judge having exercised his
discretion appropriately, the Division Bench erred in interfering
therein?
D
5. The facts leading to this appeal are as follows:
Respondent No.1 (the original Plaintiff) is the elder brother
of Petitioner No.1 (Defendant No.1 in !lie Suit). Petitioner No.2
E is the son of Petitioner No.1. The dispute between them is
about the rights to a property which is being developed and is
situated at Cadastral Survey No. 764, Mazgaon Division in
Mumbai. The case of Respondent No.1 is that he is the
exclusive owner of that property whereas the Appellants very
F much dispute the same. It is the case of Respondent No.1 that
by Conveyance Deed dated 27.3.1981 as rectified by
Rectification Deed dated 11.9.1986, he had purchased the
property from the original owners and necessary property
entries are in his name. It is his case that he has taken steps
to develop that property under the Development Control Rules
G by removing one old bungalow and several chawls situated
thereon. Two buildings have already been put up on that
property and the third one now named as 'Siddhagiri' is under
construction.

H 6. It is his further case that since 1999, he has not been
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 919
VISHANDAS RAHEJA (D) THR. LRS. [H. L. GOKHALE, J.]

keeping well, and therefore, he executed three Powers of A
Attorney from time to time. The first one was executed on
8.8.2000 in favour of his wife and Appellant No.1 which was
for performing various acts and deeds on his behalf as his
Constituted Attorneys in furtherance of this project. He executed
second Power of Attorney on 21.9.2005 again in favour of his B
wife and Appellant No.1 as well as Appellant No.2 which is also
in the similar fashion as the first one. The third Power of
Attorney was executed on 24.10.2000 which is a specific power
in favour of Appellant No.1 for giving evidence on behalf of the
Respondent No.1. It was his further case that though there was c
one Joint Account with Appellant No.1 in Indian Bank since
1993, one more Joint Account was opened on 10.10.2001, this
time in HSBC Bank which was particularly for carrying the
transactions relating to the property and developments thereon.
It was his case that all amounts deposited in that account 0
belong to him. He opened one more Joint Account on 1.2.2008
in the State Bank of India with the Appellant which was stated
to be opened for payment of taxes etc. relating to the property.

7. It is the case of Respondent No.1 that from time to time
Appellant No. 1 surreptitiously withdrew amounts that were lying E
with the HSBC bank totalling to One Crore Forty Lakhs and
invested in Birla Sun Life Mutual Funds. The Appellant No. 1
had suggested this investment to him which he had declined,
and thereafter unilaterally this account was shifted. On
Respondent No.1 's protest, the investments in mutual funds F
were redeemed and substantial amount came back into the
account. However, an amount of about Rs. 6.9 lakhs was lost
as it could not be redeemed. In view of this development, he
lost confidence in his brother and therefore served a notice
dated on 2.3.2009. on the Appellants, revoking all the three G
Powers of Attorney. He called upon both the Appellants to
desist from acting on the basis of these Powers of Attorney.
He called upon them further to return the title deeds of the
property, and render the acc~unts, and informed them that he
had appointed one Yogesh Jadhav as the Project Manager and H
920 SUPREME COURT REPORTS [2011] 6 S.C.R.

A asked the Appellants to acquaint him with various contractors
as also the position of work and balance of payment to be
made. He lastly called upon the Appellants not to operate the
account with Indian Bank as well as with the HSBC bank and
return all the bank papers.
B
8. Appellant No.1 thereafter wrote to the Manager of the
Indian Bank on 24.4.2009 pointing out that the account with their
bank was initially in the joint names of his father and himself
and subsequently on the demise of his father; the first
Respondent had been joined into that account. According to
C the first Appellant, he alone was entitled to operate the account
and removal of an amount of Rs. 65,500/- from that account by
the first Respondent was illegal. He asked the bankers to ignore
first Respondent's earlier letter dated 9.3.2009 addressed to
the bank. This was followed by a detailed reply by the first
D Appellant to the first Respondent dated 12.5.2009 wherein it
was specifically pleaded that the Powers of Attorney were
executed for valid consideration and the same were coupled
with interest in the concerned property. Thereafter, he pointed
out that although the property stood in the name of first
E Respondent, as per the family settlement which took place on
30.1.1992, two flats on the 15th floor of "Arihant Tower" (first
building developed) together with terrace, one shop, one room
and six chpwls together with land appurtenant thereto and
interest therein were allotted. to him and his father. He
F specifically pleaded that the Powers of Attorney were executed
to enable him and his son to develop those properties. He
pointed out that Respondent No.1 was the legal heir to the
extent of only one fifth share of his father's fifty percent (50%)
share at the time of his demise, i.e. ten percent (10%) only.
G
9. Thereafter, it was specifically pleaded that after the
demise of their father in the year 1994, the first Appellant
started work on the property to get the No-Objection Certificate
from the government authorities, spent good amount and time
on the construction, provided initially temporary
H
-
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 921
v1s1;ANDAS RAHEJA (D) THR. LRS. [H. L. GOKHALE, J.]

accommodation, and thereafter permanent accommodation-to A
the occupants of the shops and chawls, developed the property
by spending crores of rupees. He, inter alia, coordinated with
the architects, took steps to obtain permissions and No-
Objection Certificates (NOCs) from the Housing Board and the
Municipal authorities and attended court matters. He further B
pointed out that since Respondent No.1 had failed to effect the
necessary transfers of various properties, discussions took
place with the assistance of lawyers for an understanding, and
in spite of that he was making a dishonest claim on the property
knowing fully well what had come to his share, viz. only ten c
percent (10%) of the property. He further pointed out that he
had a larger counter-claim running into crores of rupees against
Respondent No.1, and that the entire property was in his
exclusive possession for several years and there was no
question of appointing anyone else as Project Manager. With D
respect to the bank account, he specifically pointed out that the
bank account was being operated by him in his o.J../n
independent right and the Respondent could not order him to
refrain from operating the said account.

10. This led to the first Respondent to file the above E
mentioned suit against the appellants. The Indian Bank, Hong
Kong & Shanghai Banking Corporation (HSBC Bank) and the
State Bank of India were joined as defendants No.3 to 5
respectively. The three principal prayers in the suit were as
~~s: F
"(a] Defendant Nos. 1 and 2 and their servants and agents
be restrained by a permanent order and injunction of this
Hon'ble Court from in any manner directly or indirectly
acting or holding themselves out as Attorneys or Agents G
of the Plaintiff or dealing with any of the properties or
businesses of the Plaintiff, including property bearing
Cadastral Survey No.764 of Mazgaon Division situate at
119, Chinchpokali Cross Lane, Byculla, Mumbai 400 027
H
922 SUPREME COURT REPORTS [2011] 6 S:C.R.

A described in Exhibit -A-3 hereto or any premises thereon
or under construction thereon or any part thereof;

[b] Defendant Nos. 1 and 2 and their servants and agents
be restrained by a permanent order and injunction of this
B Hon'ble Court from in any manner directly or indirectly
entering upon property bearing Cadastral Survey No. 764
of Mazgaon Division situate at 119, Chinchpokali Cross
Lane, Byculla, Mumbai 400 027 described in Exhibit - A-
3 hereto or any premises thereon or under construction
thereon or any part thereof;
c
[c] Defendant Nos. 1 and 2 and their servants and agents
be ordered and decreed to deliver to the Plaintiff
documents listed in Exhibit - U hereto and all other
documents, correspondence and records belonging to the
D Plaintiff in the possession or power of Defendant No.1 or
Defendant No.2."

The Notice of Motion taken out in the Suit had the following
prayers:
E "(a) that pending the hearing and final disposal of the Suit,
Defendant Nos. 1and 2 and their servants and agents be
restrained by interim orders and injunctions of this Hon'ble
Court from in any manner, directly or indirectly.

F (i) Acting or holding themselves out as Attorneys or
Agents of the Appellant or dealing with any of the
properties or businesses of the Plaintiff, including
property bearing Cadastral Survey No. 764 of
Mazgaon Division situate at 119, Chinchpokali
G Cross Lane, Byculla, Mumbai 400 027 described
in Exhibit "A-3" to the Plaint or any premises
thereon or under construction thereon or any part
thereof;
(ii) entering upon property bearing Cadastral Survey
H
PU~SHOTTAM VISHANDAS RAHEJA v. SHRICHAND 923
VISHANDAS RAHEJA (0) THR. LRS. [H: L. GOKHALE, J.]

No. 764 of Mazgaon Division situate at 119, A
Chinchpokali Cross Lane, Byculla, Mumbai 400
027 described in Exhibit "A-3" to the Plaint or any
premises thereon or under construction thereon or
any part thereof;
B
(iii) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any amounts
form Account No. 417627508 in the joint names of
the Plaintiff and Defendant No.1 with Defendant
No. 3.
c
(iv) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any amounts
from Account No. 002-236586-006 in the joint
names of the Plaintiff and Defendant No.1 with
Defendant No. 4. D

(v) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any amounts
from Account No. 20006421901 in the joint names
of the Plaintiff and Defendant No.1 with Defendant
E
No. 5.

(b) that pending the hearing and final disposal of the Suit,
Defendant Nos.1 and 2 and their servants and agents be
directed by an interim order and injunction of this Hon'ble
Court to deliver to the Plaintiff documents listed in Exhibit F
"U" to the Plaint and all other documents, correspondence
and records belonging to the Plaintiff in the possession or
power of Defendant No.1 or Defendant No.2

. (c) that pending admission, hearing and final disposal of G
the Suit;

(i) Defendant No.3 and their servants and agents be
restrained by an order and injunction of this Hon'ble Court
from honouring any Cheques signed by Defendant No.1
on or acting on any instructions given by Defendant No.1 H
924 SUPREME COURT REPORTS (2011] 6 S.C.R.

A relating to Account No.417627508 with Respondent No.
3 permitting any withdrawal of amounts by Defendant No.-1
from Account No.417627508 with Defendant No. 3;

(ii) Defendant No.4 and their servants and agents be
restrained by an order and injunction of this Hon'ble Court
B
from honouring any Cheques signed by Defendant No.1
on or acting on any instructions given by Defendant No.1
relating to Account No.002-236586-006 with Defendant
No. 4 permitting any withdrawal of amounts by Defendant
No.1 from Account No. 002-236586-006 with Defendant
c No. 4;

(iii) Defendant No.5 and their servants and agents be
restrained by an order and injunction of this Hon'ble Court
from honouring any Cheques signed by Defendant No.1
D on or acting on any instructions given by Defendant No.1
relating to Account No.20006421901 with Defendant No.
5 permitting any withdrawal of amounts by Respondent
No.1 from Account No. 20006421901 with Defendant No.
5;"
E
11. Respondent No.1 filed affidavit in support containing
the same submissions as above whereas the Appellant filed a
reply based on the letters which have been pointed out above.
Thereafter, further affidavits from both the parties were filed.
F Two sisters of the two brothers have filed their joint affidavit in
this Motion supporting the contention raised by Appellants
herein that there was a family settlement on 30.01.1992 and
as per the terms of the settlement, the Byculla property came
to Appellant No.1 and their father, and some other properties
were given to Respondent No.1. They also supported the
G submission of the Appellants that only on the demise of their
father, the Respondent No.1 can claim ten percent (10%) share
in that property and nothing more.

12. In view of these pleadings when this matter was heard
H before the learned Single Judge, he formed an opinion that it
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 925
VISHANDAS RAHEJA (D) THR. LRS. [H. L. GOKHALE, J.]

was not possible to hold at that stage whether the documents A
of powers of attorney were merely powers simpliciter given by
the owner of the property, or whether they contained agency
coupled with interest as contended by the Appellants herein.
The Appellants had pointed out that although the property was
purchased in the name of Respondent No.1, almost ninety B
percent of the amount for the purchase was contributed by
Appellant No. 1. Besides this, the joint account in In.Pian Bank
was opened way back in the year 1993 and the amount realized
from the sale of the flats was being deposited therein. He was
the person on the spot dealing with that property and only on C
the basis of the fact that the document of title stood in the name
of the first Respondent the interim order as sought could not
have been granted. The plea of the Appellants had to be
examined particularly when their sisters were supporting the
Appellants with respect to family settlement which was allegedly D
arrived at when their father was alive. Granting of the interim
order as prayed would have meant that the Appellants will be
required to withdraw themselves from the concerned property.
They will be restrained from entering into that property or
holding out as the attorneys of Respondent No.1 concerning that E
property. The Order by the learned Single Judge also records
that with respect to the stage of the construction it was the
counsel for the Appellants who placed the facts before the
Court on instructions that the construction was nearly complete,
payments to various agencies had been made by the first F
Appellant and at this belated stage if any interim order was
passed it would not only be inconvenient to Appellants, but also
to the purchasers of the flats and other third parties.

13. The grant of interim order would mean discontinuance
of the scenario on the spot as it existed at that point of time. G
Hence, the prayers restraining the Appellants as attorneys or
agents of first Respondent or restraining them from entering into
the property could not be granted. As far as the prayer for the
return of the documents in possession of the Appellants was
concerned, the learned Judge noted that it was not possible to H
926 SUPREME COURT REPORTS [2011] 6 S.C.R.

A issue final orders with regard to them. He, however, recorded
that appellants had agreed to forward photocopies of those
documents to Respondent No.1. The learned judge held that
no prima facie case for a mandatory injunction was made out.
yet in paragraph 22 of his order, he granted a limited interim
B order which reads as follows:

"22. For the aforesaid reasons, it is held that no
prima facie case is made out by the plaintiff and
considering that the development and construction work
has progressed to a substantial extent and only some
c finishing works are remaining so also 23 flats have been
already sold, interest of justice would be sub-served if it
is directed that the development and construction work can
be completed at site. The flats can be sold on the basis
of the documents executed but all sale proceeds must be
D deposited in the concerned joint bank account alone. The
joint bank account would be allowed to be operated only
to the extent of paying off the liabilities insofar as the suit
property and its development. which shall include payment
to contractors and other agents. However, such payment
E shall be made only on production of necessary proof and
it is only thereafter the first defendant can release the sums
from this joint account in favour of the contractors/agents/
third parties. Needless to state that the payment for the
works which have been carried out through any contractors,
F sub-contractors, agents would be made only upon the
Architect of the project certifying the said works and
issuing the necessary and relevant certificates to certify the
completion thereof. Apart from paying off these monies,
the bank account shall not be utilized by the first defendant
G for any other purposes. The monies received from the sale
of 23 flats are stated to be deposited in the said joint
account by the Plaintiff.

The documents are signed in favour of third parties
by either the plaintiff or plaintiff's daughter. As far as
H
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 927
VISHANDAS RAHEJA (D} THR. LRS. [H. L. GOKHALE, J.)

balance 27 flats are concerned, it would be open to both A
sides to negotiate with prospective buyers with necessary
intimation to each of them. It would also be open for the
first defendant to forward the offers for consideration to the
plaintiff and vice versa. All documents in favour of such
purchasers shall be signed by the plaintiff and/or his B
daughters Laxmi and Sangita. However, this entire
arrangement is without prejudice to the rights and
contentions of both sides. The plaintiff should furnish
details of all the offers received and agreements which are
entered into by him to the first defendant so as to enable c
first defendant to verify the particulars thereof. It is only after
the offers are intimated in writing that the plaintiff can
conclude the transactions and not otherwise."

14. Being aggrieved by that limited order and seeking full
interim relief, Respondent No. 1 filed an appeal to the Division D
Bench. The learned Judges of the Division Bench were
impressed by the fact that the conveyance of the property was
in the name of the Respondent and the flats were being sold
in his name. Though the learned Judges noted that the
explanation given by the Respondent No.1 about opening of E
the joint account in the year 1993 was not satisfactory, they
emphasized the fact that in the Powers of Attorney there was
no reference to the family arrangement. They also posed the
question that if ihe Appellants had developed the property why
there was no reference to those dealings in th.eir tax returns. F
They, however, noted the fact that Respondent No.1 had not
enough money to purchase the property in the year 1991
(though he contends that he had taken the money as loan from
Appellant No.1 ). In view of these factors, they were persuaded
by the fact that the Powers of Attorney had been revoked and G
in fact two flats which were supposed to be given to Appellant
No. 1 were sold by the first Respondent in the year 1993. The
Division Bench, therefore, was of the view that a strong prima
facie case was made out and an interim order will have to be
H
928 SUPREME COURT REPORTS (2011] 6 S.C.R.

A granted. Being aggrieved by this order, the present appeal has
been filed.

15. The submission on behalf of the Appellant is that the
totality of circumstances have got to be seen and the factum
of family settlement along with the contribution to the purchase
8
of the property by Appellant No.1 has to be given due
weightage. It was also submitted on their behalf that the
Appellants are the persons on the spot and they are developing
the property and none of the Respondents are available there.
The flats are undoubtedly sold in the name of the first
C Respondent because the property stands in his name. In any
case, it is submitted that the nature of powers under documents
have got to be examined on evidence with respect to the family
settlement and the Appellants cannot be non-suited at the
Motion stage when it was a family dispute and particularly when
D the sisters who were parties to the family settlement were
supporting the submission of the Appellant. The Respondent,
on the other hand, submitted that this was a fit case to grant
the interim mandatory order as was granted by the Division
Bench. The property belonged to the Respondent and it is only
E because he was not well that the Appellants carried out the
development thereon. Now, they are taking advantage of the
situation.

16. We have noted the submissions of both parties. The
F question which comes up for our consideration is whether the
learned Single Judge exercised his discretion in such an
arbitrary or perverse manner that the Appellate Court ought to
have interfered with it? The Learned Single Judge has passed
a detailed order explaining as to why he was constrained to
G grant only the limited interim relief. It was in the interest of both
the parties as well as the flat purchasers. The Order passed
by tl'le learned Single Judge is also on the basis that anything
beyond the limited protection given at that stage would deny
the opportunity to the Appellants to establish their case at the
trial when it is not in dispute that Appellant No.1 contributed
H
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 929
VISHANDAS RAHEJA (D) THR. LRS. [H. L. GOKHALE, J.]

ninety percent of the purchase money to the property and he A
took steps all throughout to develop the property. Undoubtedly,
there are many inconsistencies in the stories that are put up
by both the parties, and an interlocutory stage is not the one
where one can reach at a definite conclusion one way or the
other, particularly where the fact situation is as above and it B
would result into non-suiting one party.

17. As stated above, the question comes up as to whether
the order passed by the Division Bench was necessary. Mr.
Nariman, learned counsel appearing for the Respondents, C
relied upon the Judgment of this Court in Dorab Cawasji
Warden v. Coomi Warden [(1990) 2 SCC 117] in support.

18. As far. as this judgment is concerned, it must be noted
that it was a suit by one joint owner of an undivided family house
to restrain the other joint owners/their heirs from transferring D
their share of the house and from parting with possession to a
third party/purchaser and restraining the purchaser from
entering into and or remaining into possession of the suit
property. This was on the basis of the mandate of Section 44
of the Transfer of Property Act and particularly its proviso. This E
Couftwent into the question as to whether interlocutory
injunction of a mandatory character as against the prohibitory
injunction could be granted? The counsel for the Respondents
pointed out that the mandatory injunctions were essential to
avoid greater risk of injustice being caused as held in Films F
Rover International Ltd. v. Cannon Film Sales Ltd. [(1986) 3
All ER 87]. There is no difficulty in accepting that this Court did
accept that test. It, however, laid down the law in that behalf in
paragraphs 16 and 17 as follows:

"16. The relief of interlocutory mandatory injunctions G
are thus granted generally to preserve or restore the status
quo of the last non-contested status which preceded the
pending controversy until the final hearing when full relief
may be granted or to compel the undoing of those acts that
have been illegally done or the restoration of that which H
930 SUPREME COURT REPORTS [2011] 6 S.C.R.

A was wrongfully taken from the party complaining. But since
the granting of such an injunction to a party who fails or
would fail to establish his right at the trial may cause great
injustice or irreparable harm to the party against whom it
was granted or alternatively not granting of it to a party who
B succeeds or would succeed may equally cause great
injustice or irreparable harm, courts have evolved certain
guidelines. Generally stated these guidelines are:

(1) The plaintiff has a strong case for trial. That is, it
shall be of a higher standard than a prima facie
c case that is normally required for a prohibitory
injunction.
(2) It is necessary to prevent irreparable or serious
injury which normally cannot be compensated in
D terms of money.
(3) The balance of convenience is in favour of the one
seeking such relief.
17. Being essentially an equitably relief the grant or
E refusal of an interlocutory mandatory injunction shall
ultimately rest in the sound judicial discretion of the court
to be exercised in the light of the facts and circumstances
in each case. Though the above guidelines are neither
exhaustive nor complete or absolute rules, and there may
be exceptional circumstances needing action, applying
F
them as prerequisite for the grant or refusal of such
injunctions would be a sound exercise of a judicial
discretion."
19. In Metro Marins and another v. Bonus Watch Co. (P)
G Ltd. and others [reported in (2004) 7 SCC 478], th'e.
Respondent had filed a suit for possession contending that the
license of the Appellant to the suit property had expired. The
Respondent had prayed for a judgment on admission and
alternatively an injunction directing the Appellant to immediately
H hand over vacant and peaceful possession of the suit property.
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 931
VISHANDAS RAHEJA (D) THR. LRS. [H. L. GOKHALE, J.]

The learned Single Judge of the Calcutta High Court who heard A
the interlocutory application, came to the conclusion that he did
not find any reason to pass such an order in view of the fact
that the suit was still pending and granting of such relief would
tantamount to a decree before trial. The Appellate Bench,
however, re-examined the facts and observed that the litigation B
to be a luxury litigation directed the Receiver to put the
Respondent/Plaintiff in possession. In the appeal to this Court,
the learned counsel for the Appellants pointed out that the
Appellants were very much in possession of the premises and
the order passed by the Division Bench was contrary to the law c
laid down in Dorab Cawasji Warden (Supra). The counsel for
the Respondents, on the other hand, defended the order of the
Division Bench by contending that the period of license having
'
come to an end, mandatory injunction passed by the Division
Bench was justified. A Bench of Three Judges of this Court D
allowed the appeal and explained the proposition in Dorab
Cawasji Warden (Supra) as follows in paragraph 9:

"9. Having considered the arguments of the learned
counsel for the parties and having perused the documents
produced, we are satisfied that the impugned order of the E
appellate court cannot be sustained either on facts or in
law. As noticed by this Court, in the case of Dorab Cawasji
Warden v. Coomi Sorab Warden it has held that an interim
mandatory injunction can be granted only in exceptional
cases coming within the exceptions noticed in the said F
judgment. In our opinion, the case of the respondent herein
does not come under any one of those exceptions and
even on facts it is not such a case which calls for the
issuance of an interim mandatory injunction directing the
possession being handed over to the respondent." G
20. In Kishore Kumar Khaitan and anoth_er vs. Praveen
Kumar Singh [reported in (2006) 3 SCC 312], this Court once
again reiterated the principles with respect to the interim
mandatory injunction in paragraph 6 .in .the following words: .
. ·'l :... .' ;_ I .~i.i ilJJ .. J;. ...• ,:_ H
932 SUPREME COURT REPORTS [2011] 6 S.C.R.

A "6. An interim mandatory injunction is not a remedy
that is easily granted. It is an order that is passed only in
circumstances which are clear and the prima facie
materials clearly justify a finding that the status quo has
been altered by one of the parties to the litigation and the
B interests of justice demanded that the status quo ante be
restored by way of an interim mandatory injunction."

21. In our view, the learned Single Judge has considered
all the relevant aspects of the matter and thereafter passed the
limited interim order whereby documents for sale of the flats
C will continue to be signed by the Respondents, though, the
monies coming into the bank account thereafter will be utilized
only for the purposes that are necessary, as stated in paragraph
22 extracted above. The appellants have not been directed to
be removed from the property inasmuch as they were the
D people on the spot carrying on the development prior to filing
of the suit. The .order sought by the respondents, if granted,
would mean granting. all the reliefs and a sort of pre-trial decree
without the opportunity to the Appellants to have their plea
examined with respect to the family arrangement, which plea
E is supported by their sisters.

22. The test to be applied to assess the correctness of the
order of the learned Single Judge would be whether the order
is so arbitrary, capricious or perverse that it should be
interfered at an interlocutory stage in an intra-Court appeal. In
F Wander Ltd. and another vs. Antox India P.Ltd. [reported in
1990 (Supp) SCC 727], a bench of Three Judges of this Court
has laid down the law in this respect which has been
consistently followed. In that matter, Appellant No.1 being the
registered proprietor of a Trade Mark had entered into an
G agreement with the Respondent permitting it to manufacture
certain pharmaceutical product. On the basis of that
arrangement, the respondent applied for the requisite license
from the authorities concerned. In view the dispute between the
parties, the Appellant called upon the Respondent to stop
H manufacturing the particular product, and entered into an
PURSHOTTAM VISHANDAS RAHEJA v. SHRICHAND 933
VISHANDAS RAHEJA (0) THR. LRS. [H. L. GOKHALE, J.] .
-----
arrangement with another company. The Respondent filed a suit A
and sought a temporary injunction to restrain the Appellant and
its new nominee-company from manufacturing the products
concerned. This was on the basis of continued user in respect
of the Trade Mark of the. product by the Respondent. It was
contended that user was in his own right. A learned Single B
Judge of the High Court declined to grant the interim injunction
which was granted in appeal by the Appellate Bench of Madras
High Court. This Court, in its judgment, held that the Appellate
Bench had erred firstly, in misdirecting with respect to the nature
of its powers in appeal and secondly, in basing its judgment c
on the alleged user of the Trade Mark. A bench of Three Judge
of this Court laid down the law in this beha.lf in paragraph 14 of
the judgment which is as follows:
"14. The appeals before the Division Bench were
against the exercise of discretion by the Single Judge. In D
such appeals, the appellate court will not interfere with the
exercise of discretion of the court of first instance and
substitute its own discretion 'except where the discretion
has been shown to have been exercised arbitrarily, or
capriciously or perversely or where the court had ignored E
the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of
discretion is said to be an appeal on principle. Appellate
court will not reassess the material and seek to reach a
conclusion different from the one reached by the court F
below if the one reached by that court was reasonably
possible on the material. The appellate court would
normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come G
to a contrary conclusion. If the discretion has been
exercised by the trial court reasonably and in a judicial
manner the fact that the appellate court would have taken
a different view may not justify interference with the trial
court's exercise of discretion. After referring to these H
934 SUPREME COURT REPORTS [2011) 6 S.C.R.
•
A principles Gajendragadkar, J. in Printers (Mysore) Private
Ltd. v. Pothan Joseph. (1960) 3 SCR 713 ·
,.... These principles are well established, but as has
been qbserved by Viscount Simon in Charles Osenton &
Co. v. Jhanaton' ... the law as to the reversal by a. court of
B appeal of an order made by a judge below in the exercise
of his discretion is well established, and any difficµlty that
arises is due only to the application of well settled
principles in an individual case'.
"
The appellate judgment does not seem to .defer to
c this principle."
It is to be noted that the proposition laid down has been
consistently followed thereafter.
23. For the reasons stated above, in our view, the present
D case, is not one where mandatory interim injunction, as sought
by the Respondents was justified. The learned Single Judge
had passed a reasoned order, and, in no way, it could be said
that he had exercised the discretion in an arbitrary, capricious
or perverse manner, or had ignored the settled principles of law
E regarding grant or refusal of interlocutory injunction. There was
no reason for the Appellate Bench to interfere and set aside
that order. · "'
24. This appeal is, therefore, allowed. the order passed
by the Division Bench is set aside and that .of .the learned Single
F Judge is restored. We make it clear that we have no~ ,made
any observations on the merits of the rival c;:J~ims of the
Appellants as well as the Respondents. We have confined
ourselves only with respect to the question as to what should
be the interlocutory arrangement in the facts and circumstances
G of the present case .. In our view, the order passed by the learned
Single Judge was well reasoned and justified in that context.
In the facts of the case, the parties will bear their own
costs.
H R.P. Appeal allowed.